Pensioners were frustrated by the lack of support for them in Kwasi Kwarteng’s mini-budget on Friday, while affluent working-age people will reap many benefits from the new policy. Concerns have been raised by Silver Voices that there has been no confirmation of the triple lockdown being reinstated to guarantee a state pension increase from April next year.
Dennis Reed, director of Silver Voices, said: “The stated goal of the budget is to put more money into the pockets of the population to encourage spending and thereby stimulate the economy.
“Because older people have been ‘forgotten’, millions of seniors who will scrape together their money this winter to avoid starvation and hypothermia will not contribute to this plan.
“Older people will not buy luxury goods or go to the theater or go on vacation because poverty will keep them locked in their cold homes.
“The basic income of a quarter of the adult population has been ignored and seniors expect us to protest for them.”
The new guidelines announced by Kwasi Kwarteng on Friday include scrapping the additional 45 per cent income tax rate for those earning more than £150,000.
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Previous plans to lower the base tax rate from 20 percent to 19 percent are brought forward a year to April 2023.
Chancellor Kwasi Kwarteng is also set to cut corporate taxes and has confirmed the cap on bankers’ bonuses will be scrapped in hopes of attracting more investment into the UK economy.
The threshold for paying stamp duty on property purchases will also be raised from £125,000 to £250,000.
The mini-budget was not an official budget but served more as a “growth plan,” a Treasury spokesman told Express.co.uk.
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Mr Kwarteng said: “To reaffirm the UK’s status as the world’s financial services hub, I will present an ambitious package of regulatory reforms later in the autumn.”
Helen Morrissey, pensions analyst at Hargreaves Lansdown, said the income tax changes could help pensioners.
She said: “Both pensions and entitlements are subject to income tax so this will be a shot in the arm for pensioners.
“The 1 per cent cut might sound small, but it can add up to serious savings if someone on £25,000 earns over £125 less a year.
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“Property taxpayers who receive an income from their pension will be relieved to give less to the Treasury so they can spend more to make ends meet.”
Andrew Tully, technical director at Canada Life, said: “There is a retirement planning opportunity for those who can afford to contribute to pensions in the current tax year.
“Additional taxpayers will get a 45 percent relief, while next year’s contributions will only get a 40 percent relief.
“Similarly, property taxpayers can get 20 percent tax credits this year, which will drop to 19 percent next year.”
The Institute for Fiscal Studies warned that only those earning over £155,000 will be the net beneficiaries of tax policies announced by Conservatives in the current Parliament, with the “vast majority of income taxpayers paying more tax”.
The Chancellor said during a factory visit in Kent last week: “We can’t have a tax regime where you hit a 70 year high so the last time we had tax rates at this level before my tax cuts actually came to the throne before Her late Majesty would have.
“That was totally untenable, so I’m happy to be able to cut taxes piecemeal this morning.”
Express.co.uk has asked the Treasury for an opinion on Silver Voices’ claims.
